From Tilak´s Substack

By Tilak Doshi

As the American Democratic establishment is being convulsed by an insurgent Democratic Socialists of America’s success in New York City with its outright communist messaging, the last several months have also seen a faction of moderate Democrats quietly distancing itself from the more apocalyptic Al Gore-type climate advocacy. “Liberals should support America’s oil and gas industry,” wrote Matt Yglesias in a radical opinion for the New York Times last December. Earlier this month, also at the New York Times, Lisa Friedman and Brad Plumer reported that many party moderates are backing away from dire climate messaging to focus solely on affordability, pointing to election losses among climate hawks and several blue states failing to meet their climate goals.

Confronted with gasoline prices hovering around $4.55 per gallon — up from $2.98 before the Trump administration launched its military campaign against Iran in late February 2026 — and inflation at a three-year high of 3.8%, various moderate or centrist Democrats could support “a less ambitious climate agenda if the party returns to power in Washington” according to Friedman and Plumer in the NYT. As empirical reality bites, even New York Governor Kathy Hochul – for long a climate hawk and partly responsible for the city’s energy woes – now supports some gas pipelines and significantly scaled back the state’s climate law last month.

The climate faithful will have none of It

A recent piece in the American Prospect by its Senior Editor, Ryan Cooper, is having none of this turn to moderation. The American Prospect is a Left-progressive outlet on the US political spectrum “devoted to promoting informed discussion on public policy from a progressive perspective” and calls itself “an independent voice for liberal thought”. It was founded in 1990 by Robert Kuttner, Robert Reich and Paul Starr explicitly as a response to the conservative ascendancy of the 1980s, with the goal of revitalising American liberalism and progressivism.

The article characterises the retreat by centrists and moderates from climate policy not as a belated recognition of economic reality but as ideological cowardice. The lesson of the Hormuz crisis, Cooper insists, is not that Western economies are dangerously exposed to fossil fuel supply disruptions, but that governments should redouble their commitment to renewable energy. The crisis is not a warning but an opportunity.

This is a familiar rhetorical manoeuvre from the green energy lobby: every crisis becomes a reason to accelerate the energy transition, and every inconvenient cost is attributed to insufficient commitment to the cause.

But the Hormuz crisis has demonstrated the indispensability of fossil fuels across the full breadth of the modern economy — not merely the electricity grid, which is the almost exclusive focus of the American Prospect’s prescriptions. This matters enormously. According to the IEA, electricity accounts for only around 21% of total global final energy consumption. The remaining 79% is met by the direct combustion of fossil fuels or use as feedstock — in transport, industrial heat, agriculture, shipping, aviation and petrochemicals. Jet engines do not run on solar power. Blast furnaces and cement kilns cannot be electrified at any meaningful scale with current technology. When the Hormuz strait closed, it was this 79% that took the immediate hit.

QatarEnergy declared force majeure on its entire LNG output after Iranian drone strikes knocked out 17% of its capacity at Ras Laffan, with repairs expected to take up to five years. Jet fuel prices surged by more than 50%. Diesel surged, raising costs for every truck, tractor and freight vessel on the planet. Fertiliser prices spiked as the Gulf — responsible for roughly 30-35% of global urea exports — was effectively shut off, threatening agricultural supply chains from South Asia to sub-Saharan Africa. This is what a fossil fuel supply shock looks like: it is not primarily a story about electricity bills, but about the physical foundations of the entire global economy. The American Prospect’s prescription — build more solar and wind — addresses, at most, one-fifth of the problem. The other four-fifths do not feature.

The renewables cost myth: LCOE and its discontents

The author’s first claim is that renewables are cheaper than fossil fuels – a proposition resting almost entirely on the Levelised Cost of Energy (LCOE), the metric favoured by Lazard in its widely-cited annual reports and repeated as gospel by climate journalists and green policy advocates the world over.

The LCOE is not fit for purpose, and it is time to stop pretending renewables are cheap. The LCOE captures only the costs of generating a unit of electricity from a wind farm or solar panel considered in isolation from the grid into which it feeds. It entirely ignores the system costs imposed by intermittent generators on the wider network. Lazard itself acknowledges in its reports that the metric “does not consider the intermittent nature of selected renewable energy technologies or the related grid impacts of incremental renewable energy deployment” — which is, of course, the most important thing to consider.

As MIT economist Paul Joskow noted as far back as 2011, levelised cost comparisons are a misleading metric for comparing intermittent and dispatchable generating technologies, because they ignore differences in production profiles and the large variations in the market value of electricity produced at different times of day and year.

Those omitted system costs are substantial and well-documented: backup dispatchable generation kept on standby for when the wind does not blow and the sun does not shine; grid balancing and frequency regulation services; transmission infrastructure to connect remote wind and solar farms to demand centres; curtailment payments for overproduction; and the Contracts for Difference subsidies underwriting renewables investment in the first place.

The cheap renewables claim rests on a fundamental confusion between marginal costs and system costs. The author inadvertently concedes as much, acknowledging that because electricity prices are still set by gas peaker plants in most places, “cheap solar and wind will not flow automatically into savings on power bills”. He then argues that adding ever more solar, wind and storage will eventually crowd out gas altogether and achieve real savings.

This is not an energy policy; it is a wish. Dispatchable generation — power that can be called on regardless of weather — will continue to set the marginal price in any grid that must maintain security of supply. Battery storage capable of meeting multi-day demand shortfalls at grid scale remains, for the foreseeable future, prohibitively expensive. The confusion between plant-level unit cost and whole-system cost is not an innocent analytical error. It is the fiction on which the entire ‘cheap renewables’ narrative depends.

Spain and Queensland: the author’s evidence against his own thesis

To sustain his case, the author cites two examples: Spain and Queensland. Spain is held up as a country “going gangbusters” with solar. This is particularly unfortunate given what happened on April 28th 2025, when the Iberian Peninsula’s power system suffered a cascading failure resulting in the loss of approximately 15 gigawatts of generation and a blackout affecting tens of millions. The root cause, as documented by Kathryn Porter and confirmed by the ENTSO-E expert panel, was a stability failure rooted in the grid’s insufficient inertia — a direct consequence of operating with solar providing nearly 60% of generation at the moment of the incident. Traditional synchronous generators provide rotational inertia that buffers against sudden frequency and voltage disturbances. Solar inverters do not. When oscillations from a faulty PV inverter cascaded through a system already near its stability limits, the result was a continent-wide systems failure. The Sánchez Government’s response has been to double down on renewables and press ahead with the closure of Spain’s nuclear fleet. The ideological commitment to the energy transition is, apparently, immune to empirical falsification.

Queensland is the author’s second exhibit, where he implies battery storage has resolved the intermittency problem and displaced fossil fuels as the marginal price-setter. The facts are rather different. According to the Queensland Audit Office’s December 2025 report, coal accounted for approximately 63% of the state’s electricity generation in 2024-25, remaining by a large margin its primary power source. Gas “has remained stable” and “during coal-fired outages, gas serves as a key alternative”.

The Queensland state government — which knows its own grid rather better than a Washington policy journal — arrived at a rather different conclusion to the American Prospect’s. Its October 2025 Energy Roadmap states plainly that “coal will operate to underpin affordable and reliable energy supply for as long as needed” — a commitment that its own modelling extends into the 2040s — and describes gas as “a critical technology for system reliability and firming as the generation mix changes over time”. The newly elected Crisafulli Government has cancelled major renewable projects, including the Forest Wind Farm, the Moonlight Range Wind Farm and the Pioneer-Burdekin pumped hydro scheme, and committed A$1.6 billion to maintain existing coal power stations. This is not the behaviour of a Government that believes it has resolved its dependence on fossil fuels.

It is true that batteries set the marginal price in some trading intervals — particularly at midday when rooftop solar floods the grid. Renewables advocates have seized on these hours as evidence of a structural transformation. But setting the price when solar output is maximal is a very different thing from providing reliable power across all hours of the day and year. The critical question is what happens when the sun sets, the wind drops or demand peaks on a hot summer evening. The answer, as Queensland’s own Government has concluded, is that coal and gas remain indispensable. That is why retail electricity bills in Queensland rose 34% between 2022 and 2025 even as renewable capacity expanded — a rather awkward fact for the thesis that more solar and wind delivers affordability.

China’s supply chain: the geopolitical risk the greens ignore

The author’s third argument — that fossil fuels are uniquely geopolitically vulnerable, whereas renewables offer energy security — is perhaps the most intellectually dishonest. It says nothing about the profound supply chain vulnerabilities of the renewable energy system itself. The IEA confirms that China controls more than 80% of every manufacturing stage of solar panels. Beyond panels, China leads refined production for 19 of the 20 key energy transition minerals, including 91% of rare earth refining and around 60% of global lithium and cobalt processing.

A geopolitical disruption involving China would cripple the renewable buildout at its foundations — and this is not a theoretical concern: Beijing has already restricted exports of gallium, germanium, antimony and seven heavy rare earth elements to the United States. Compared to the diversified global oil market, with multiple producing regions and decades of deep infrastructure, the renewable supply chain represents a far more concentrated and strategically fragile dependency. Green advocates invoke geopolitical risk selectively: applied always to the fossil fuels they wish to eliminate, never to the Chinese supply chains they are actively building.

The cognitive dissonance runs deep. The Biden administration’s own Inflation Reduction Act was partly motivated by recognition that dependence on Chinese supply chains for the energy transition posed a strategic risk. Yet, as the single largest investment in climate and energy in American history, the IRA simultaneously deployed hundreds of billions in subsidies to build out the very technologies whose critical components must overwhelmingly come from China. The Prospect’s author, who presumably applauded the IRA, exhibits no awareness of this contradiction. It is of a piece with the broader pattern of motivated reasoning that characterises the piece: geopolitical risk is real and urgent when it applies to fossil fuels; it is invisible when it applies to the alternative being promoted.

The moderate Democrats are right — for the wrong reasons

There is something almost poignant about the Prospect author’s fury at his moderate Democratic colleagues. He accuses them of timidity and fecklessness for softening their climate commitments in the face of voter concern about energy costs. But the ‘moderate’ instinct — whatever its motivations — reflects some level of awareness of the Democrat constituency. Voters watching household finances strained by more than $300 per household in additional fuel costs since the war began are not interested in lectures about the long-run cost advantages of solar on an idealised grid. They want affordable, reliable energy now. The governing class that ignores this reality – as Europe’s Net Zero establishment has discovered at electoral cost from The Hague to Rome – eventually confronts it at the ballot box. That lesson is as applicable to Washington as it is to Brussels or Westminster.

The broader lesson of the Hormuz crisis — a lesson almost perfectly inverted by the American Prospect — is that energy security cannot be reduced to a story about the electricity grid. The IEA’s head called it “the greatest global energy security challenge in history” not because a few wind farms were offline, but because the world runs on oil, gas and coal for the overwhelming majority of its energy needs: every aircraft, every cargo ship, every combine harvester, every petrochemical plant, every industrial furnace on the planet. None of these will be electrified on any timescale relevant to current energy policymaking.

Solar panels and wind turbines address, at most, one-fifth of global energy demand — and even within that fifth, they cannot supply dispatchable power on demand, as Spain’s blackout and Queensland’s coal-dependent grid amply demonstrate. In a rational world, the Hormuz shock would prompt a sober reassessment of the quixotic ‘energy transition’, with urgent attention to security across all energy sectors and an honest reckoning with the Chinese supply chain dependencies that an accelerated renewables buildout entails.

Instead, the climate Establishment reaches for its familiar toolkit: advocacy, subsidy demands and righteous exhortation. The moderate Democrats retreating from this position may not be merely cowards. They might be turning minimally pragmatic to keep their votes. That, in the current climate — political as much as meteorological — is more than can be said for their critics.